Ep 404: How to deal with investment concentration risk
In this episode, Stuart breaks down what concentration risk really means and why it is not just about returns, but dependence. From large shareholdings to property and business exposure, he explains how having too much tied to a single asset can increase risk unless it is properly understood in the context of your broader strategy.Stuart introduces a practical three-step framework to assess concentration risk: evaluating future returns and opportunity cost, testing how dependent your financial plan is on the asset, and comparing the cost of selling versus staying exposed. He also challenges…
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